Explain why the role of a consumer is important in an economic system.
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The role of a consumer (or of consumers in general) is important in an economic system because it is consumers who demand goods and services. When they do this, they make it so that other people can have jobs making the goods and services the consumers want.
You can see how important consumers are by looking at our own economy today. Consumer spending on goods and services makes up close to 70% of the GDP of the United States. If consumers did not demand these goods and services, many people would be out of work.
A consumer is an individual who buys products or services for personal use and not for manufacture or resale. A consumer is someone who can make the decision whether or not to purchase an item at the store, and someone who can be influenced by marketing and advertisements. Any time someone goes to a store and purchases a toy, shirt, beverage, or anything else, they are making that decision as a consumer.
Basically, without consumers there would be no economic system. Without consumers to purchase the goods, there would be no demand for the goods. This has an effect on the entire economic system as well. It includes everything from the product itself to marketing.
The consumer dictates so much of an economic system. Their role is significant. As previously stated, they determine the demand for a product. This becomes essential for without the consumer, issues of supply are thrown into complete limbo as there is a lack of direction. Additionally, a consumer's ability to spend helps to determine cost. Businesses don't do themselves any favor when price controls are constructed without taking the consumer's ability to spend into account. Through the consumer's purchasing power, the entire notion of business is accomplished and without the consumer, this important aspect of the exchange of goods and services is lacking.
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